VAT officially slashed to 8% in 2022

 20/01/2022

U&I Logistics - On January 11, the National Assembly passed a resolution on fiscal and monetary policies to support the program of socio-economic recovery and development. Accordingly, the National Assembly agreed to reduce the value-added tax rate (VAT) by 2% in 2022, applicable to groups of goods and services currently subject to 10% VAT. The Resolution takes effect from January 11, 2022 to the end of December 31, 2023.

 

The pandemic has disrupted supply chains, negatively affecting revenue and profits of businesses. In particular, the high sea freight rates lead to much greater pressure on cash flow of logistics enterprises. To support businesses, the VAT reduction policy plays a key role in saving costs for logistics services in particular and goods and services in general.

 

Specific VAT exemption and reduction: Reduction of 2% value-added tax rate in 2022, applicable to groups of goods and services currently subject to the 10% value-added tax rate, excluding some groups of telecommunications services, information technology, financial activities, banking, securities, insurance, real estate, v.v

 

In addition, policies on developmental investment, social security, labor, employment and policies to support enterprises, cooperatives, and business households were also implemented.

• About development policy investments: Increase development and investment costs from the state budget to a maximum of 176,000 billion VND, concentrated in the two years 2022 and 2023.
• About social security, labor, employment: Social bank grants a maximum of VND 5,000 billion, including interest compensation and a management fee of VND 2,000 billion to implement the program's preferential lending policy; maximum interest rate support of 3,000 billion VND for borrowers under credit policy programs with current lending interest rates above 6%/year.
• About supporting businesses, cooperatives, households: Interest rate support 2%/year up to 40,000 billion VND through the system of commercial banks for a number of important industries and fields, businesses, cooperatives, households that are able to repay debts, have financial resilience; loans to renovate old apartments, social housing, houses for workers to rent and buy...

 

After news about tax policy, many policies are proposed to promote the spearhead service in 2022. Typically, the proposal of the leadership of the Vietnam Logistics Service Association (VLA) about not applying policies that increase the cost of logistics services in general, such as transportation costs, fuel prices, BOT prices, fees, and other related fees, and reduce port infrastructure charges by provinces and cities

Moreover, businesses expect the Government to make a decision to develop the shipping industry with Vietnamese brand names. Typically, developing a fleet of large container ships for long-distance business to meet the needs of Vietnam's import and export cargo transportation and reduce costs for domestic logistics enterprises.

 

Starting 2022 with strong momentum, the logistics industry promises to reap the rewards from foreign-invested enterprises (FDI). Because of the impact of the Covid-19 pandemic, these businesses are also looking for ways to save costs when looking for new investment hotspots. It can be said that in order to attract and maintain FDI flows, logistics services are considered as one of the prerequisites. Therefore, the reduced cost of goods and services from the VAT policy is a good opportunity for Vietnamese logistics enterprises.

 

U&I Logistics

 

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